#Canadiandirectinvestment; #StatisticsCanada; #weakerCanadiandollar
Ottawa, Apr 25 (Canadian-Media): The stock of Canadian direct investment abroad grew at a faster rate (+10.4%) in 2018, largely due to a weaker Canadian dollar, Statistics Canada reported.
Statistics Canada. Image credit: Twitter handle
Statistics Canada, the national statistical office ensures Canadians have the key information on Canada's economy, society and environment that they require to function effectively as citizens and decision makers.
The growth in the stock of foreign direct investment in Canada also picked up pace (+5.0%) when compared with the two previous years.
The year 2018 witnessed an increase in the stock of Canadian direct investment abroad by 10.4 percent in 2018 to reach $1,289 billion.
The significantly higher than in the previous two years growth in the stock of Canadian direct investment abroad in 2018 was was due mainly to valuation gains from a weaker Canadian dollar, which resulted in a $72 billion upward revaluation of Canada's direct investment position.
In 2018, the Canadian dollar depreciated by 8.7% against the US dollar, 3.7% against the euro and 2.8% against the British pound.
On a regional basis, nearly three quarters of the 2018 increase in the stock of Canadian direct investment abroad was due to higher investment positions in the North America region, primarily the United States (up $70 billion to $595 billion). Most of the remaining increase was in Europe, led by higher investment in the United Kingdom (up $12 billion to $109 billion) and Luxembourg (up $8 billion to $90 billion).
Changes in the value of currency also contributed to the lower investment positions in South and Central America, most notably in Argentina where a 53% decline in the value of the Argentinian peso against the Canadian dollar led to significant reduction in the investment position.
Finance and insurance (37%) continued to be the most significant industry for Canadian direct investment abroad in 2018, followed by mining and oil and gas extraction (15%) and management of companies and enterprises (13%).
The transportation and warehousing industry in particular has experienced a period of rapid growth in recent years, with the overall investment position increasing by nearly 150% from $34 billion in 2014 to $84 billion in 2018. This was largely driven by merger and acquisition activity in the United States.